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DISH Q4 Profit Misses Mark, in Sharp Contrast to DirecTV

DISH network missed analyst estimates for the fourth quarter, with net income falling to $209 million from $313 million one year ago. The No. 2 U.S. satellite TV provider suggested larger customer acquisition costs were to blame.

DISH revenue slid 1.1 percent to $3.59 billion, which was higher than the $3.56 billion average analyst estimate. But margins bit it, leading the company to trail analyst expectations of $240.4 million in profit.

For 2012, “higher subscriber-related expenses driven by programming costs, increased subscriber acquisition costs from higher gross additions, as well as certain one-time items” were to blame, the company said.

Those include expenses related to litigation.

DISH added just 14,000 net new pay-TV subscribers in the fourth quarter, while analysts had anticipated it to claim 48,000. The company said that going forward, higher carriage fees are forcing it to raise prices about $5 per month per package.

In contrast, No. 1 U.S. satellite TV provider DirecTV (News - Alert) grew profit 31 percent year-over-year for the fourth quarter of 2012, even as subscriber additions ebbed. The success came on the back of success in Latin America and a strategic shift towards “premium” subscribers who contribute more ARPU to the company coffers.

The company beat Wall Street estimates handily for the fourth quarter, posting earnings of $942 million, or $1.55 per share, for the quarter ended Dec. 31. That's up from $718 million, or $1.02 per share one year ago.

The El Segundo, Calif. company crossed the 20 million subscriber threshold for the first time, putting it in the No. 3 position by subscriber totals, behind Netflix and Comcast (News - Alert). It added 103,000 U.S. subscribers in the quarter, which represents a slight fall-off from Q4 2011, when it added 125,000.